BSE to introduce new index for derivatives trading
Calcutta: In keeping with the dictum of the players in the derivatives market, "more the volatility, more the interest", the governing body of the Bombay Stock Exchange has decided to introduce a new index, which would be narrower and more sensitive than the 30-share sensex.

The new index, likely to be ready by April next year, will include those technology heavyweights, which did not find a place in the sensex.

The stock exchange is also planning to introduce trading in stock options and futures towards the beginning of the next fiscal. Trading in index options is likely to begin in November this year, with about 30-50 scrips.

The criteria for the selection of these scrips would be liquidity and market capitalisation. Sources also said that with rolling settlement being mandated for nearly all the actively-traded stocks, speculative activity is likely to switch to the derivatives market. The derivatives market should see a spurt in activities by the end of this fiscal.

According to sources, the factors impeding the growth of the derivatives market in India were the absence of clear guidelines on tax-related issues and the high cost of transaction.
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Maiden scheme from IDBI-Principal
Mumbai: Leading financial institution, IDBI, has announced that its joint venture with Principal Financial Services Group, has firmed up plans to launch its maiden mutual fund scheme that is aimed at offering "life stage solutions" to investors.

The mutual fund (MF) scheme, which is slated for launch on October 3, has been devised in such a manner that based on an investor's risk taking appetite, age profile and investment goals, his/her investment portfolio could be customised.

The initial public offer of the scheme, which has units of Rs 10 face value, would be open for three weeks beginning October 3 and minimum investment amount would be for Rs 5,000 and multiples of Rs 1,000 thereafter.

The fund would declare net asset value on 365 days of the year and have facility for three nominations so that retail investors could pool their resources to make an application. Further, according to the fund officials, the facility of three nominations will also lead to the capital gains getting reduced drastically. The scheme is also likely to have features like systematic investment plan, systematic withdrawal plan and switching facility between various schemes.
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